5/19/2021
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constitutional right against
infringement of contracts;
the wisdom of the law cannot
be questioned by the Court.
Finally, petitioners argue that the imposition of the new rates under R.A. No. 11199
violates their constitutional right against infringement of their existing contracts with
sea-based OFWs.
This argument is not novel and has been squarely addressed by the Court in
Conference of Maritime Manning Agencies, Inc. In that case, it was explained that:
The constitutional prohibition against impairing contractual obligations is not
absolute and is not to be read with literal exactness. It is restricted to
contracts with respect to property or some object of value and which confer
rights that may be asserted in a court of justice; it has no application to
statutes relating to public subjects within the domain of the general
legislative powers of the State and involving the public rights and public
welfare of the entire community affected by it. It does not prevent a proper
exercise by the State of its police power by enacting regulations reasonably
necessary to secure the health, safety, morals, comfort, or general welfare
of the community, even though contracts may thereby be affected, for such
matters cannot be placed by contract beyond the power of the State to
regulate and control them.
Verily, the freedom to contract is not absolute; all contracts and all
rights are subject to the police power of the State and not only may
regulations which affect them be established by the State, but all
such regulations must be subject to change from time to time, as the
general well-being of the community may require, or as the
circumstances may change, or as experience may demonstrate the
necessity. And under the Civil Code, contracts of labor are explicitly subject
to the police power of the State because they are not ordinary contracts but
are impressed with public interest. Article 1700 thereof expressly provides:
ART. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest
that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
The challenged resolution and memorandum circular being valid
implementations of E.O. No. 797, which was enacted under the police power
of the State, they cannot be struck down on the ground that they violate the
contract clause. To hold otherwise is to alter long-established constitutional
https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/66432
22/28
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